Freelance and Self-Employment in Switzerland
Switzerland is freelance-friendly: the sole proprietorship (Einzelfirma) can be set up in days and there are no mandatory minimum capital requirements. However, self-employed workers lose ALV (unemployment insurance) coverage and must self-pay AHV. Understanding the Swiss setup is essential before making the leap.
- Swiss employment law explained for international professionals
- Legal basis, practical advice and what to do
- Relevant for expats, cross-border workers and newcomers
Registering as Self-Employed
The simplest structure is the sole proprietorship (Einzelfirma). No registration required at the commercial register until annual revenue exceeds CHF 100,000. First step: register with the AHV compensation fund (Ausgleichskasse) in your canton, this is mandatory. You declare your income annually and pay AHV contributions on net profit. A GmbH (LLC) requires CHF 20,000 minimum capital, registration in the commercial register, and more compliance, but separates personal and business liability.
AHV, Taxes and VAT
Self-employed AHV: rate is 9.65% on net profit (lower than the combined employee/employer rate of 10.6%, but you pay both sides). You also pay IV and EO contributions. Income tax: declare business income on your personal tax return. VAT: mandatory registration if annual turnover exceeds CHF 100,000. Rate: 8.1% standard, 3.8% accommodation, 2.6% food/books. Note: you cannot claim ALV (unemployment insurance) as a self-employed person, this is a significant risk to plan for.
Contracts and Bogus Self-Employment
Swiss law distinguishes genuine self-employment from bogus self-employment (Scheinselbständigkeit), where a company classifies a dependent worker as a contractor to avoid social security contributions. AHV compensation funds actively audit this. Criteria for genuine self-employment: multiple clients, own tools/premises, bear own economic risk, set own hours. If declared self-employed but working exclusively for one company with their tools and schedule, the AHV may reclassify you as an employee, and the company becomes liable for backdated contributions.
Frequently Asked Questions
Do I need to register a company to freelance in Switzerland?
No. You can freelance as a sole proprietor (Einzelfirma) without registering at the commercial register if turnover is below CHF 100,000. Registering with the AHV compensation fund is mandatory regardless of turnover.
Do freelancers in Switzerland pay unemployment insurance?
Self-employed people do not pay ALV and cannot claim unemployment benefit. This is a key risk of self-employment in Switzerland. Some opt to maintain ALV coverage voluntarily (limited options) or build personal reserves.
What is the difference between a sole proprietorship and a GmbH in Switzerland?
A sole proprietorship has unlimited personal liability, business debts are your personal debts. A GmbH provides limited liability (personal assets protected) but requires CHF 20,000 capital and commercial register entry. Most freelancers start as sole proprietors and consider a GmbH when income grows.
Federal Law on Old-Age and Survivors' Insurance (AHVG/LAVS) · Swiss Federal Social Insurance Office (FSIO/OFAS) · admin.ch